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Please tell us about Macter International Limited?

Alhamdulillah, Macter is amongst the leading pharmaceutical compa-nies of Pakistan. It has a successful 30-year track record in the manufac-turing and marketing of pharmaceuti-cal formulations. Macter enjoys a ster-ling reputation of manufacturing qual-ity products and is amongst the top 10 manufacturers by volume.

Macter’s medicines are available in various medical specialties such as GI and Hepatology, Pulmonology, Diabetelogy, Cardiology, Anti-Infectives, Primary Care, amongst oth-ers. While continuously maintaining focus on quality, Macter’s approach has been to price medicines so that they remain accessible to the majority of the population.

Apart from its own brands which set the standard for quality and afforda-bility, Macter also manufactures medi-cines for leading MNCs in Pakistan. Macter’s clients (past and present) include names such as Novartis, Johnson & Johnson, Bayer, Pfi zer, Procter & Gamble, Merck, Reckitt Benckiser and Kalbe. The manufac-turing tie-ups with these international companies over the past two decades has helped Macter develop its Quality and Manufacturing systems to meet with international standards and requirements. The high volumes through contract manufacturing also help in keeping costs low which is passed on to patients in terms of lower prices.

Macter employs more than 1,000 highly talented individuals, has reve-nues in excess of Rs2 billion per annum and is a Public Limited company since 2012.

Macter has recently received regula-tory approvals for launching biological medicines in Pakistan. Why is this an important milestone?

I believe this is a huge milestone for Pakistan. Biological medicines repre-sent a very important area of modern medicine. Many serious and life-threat-ening diseases today are treated through these advanced medicines. Majority of these biological medicines are being imported at high prices and so create diffi culties for patient access.

Out of the 600 plus manufacturers in Pakistan, only four or fi ve companies have approved facilities and capabili-ties for manufacturing the biologics.

Additionally, since the past four years, applications for marketing authorisations of biological drugs could not be processed by MOH/DRAP. This was creating a monopolis-tic situation on the one hand, leading to high prices for patients and loss of foreign currency to the National Exchequer due to lack of import sub-stitution — worth billions of rupees per annum.

The delay in product approvals was also threatening to stifl e out the nas-cent investments in this strategically important area for Pakistan — some companies abandoned their biological projects during this time. However, under the leadership of the honoura-ble Minister of Health and the esteemed Secretary of Health, the DRAP leadership wisely crafted a pro-cess for regulatory approvals for bio-logic medicines based on WHO guide-lines.

As the regulatory process for prod-uct review and approvals has started, it will InshaAllah lead to faster patient access to innovative, life-saving medi-cines at affordable prices; import sub-stitution will help save foreign exchange; and encourage further investment in biotechnology which is a strategically critical area for any nation. Therefore this is a signifi cant milestone for Pakistan.

From Macter’s point of view, in get-ting our products approved, we became the fi rst company to comply with DRAP’s enhanced regulatory requirements based on WHO guide-lines. The four-year delay was very challenging on many accounts but per-haps the most diffi cult was to explain to our international investors (Asian Development Bank, International

Finance Corporation, CDC, Proparco, etc) when the issues would eventually get resolved. Everything, however, happens for a purpose and a reason and, despite everything, for the best. We are now excitedly looking forward to launching our fi rst bunch of approved products; getting our other pending applications approved; in order to extend the maximum benefi ts to the patients and our country.

The public is generally concerned about the quality and prices of phar-maceuticals. Where does Macter stand with respect to quality and prices?

We have always strived to maintain the highest possible standards of qual-ity. It was this commitment which made Macter a preferred choice of Multi Nationals for the manufacturing of their brands. Getting approved as a contract manufacturer for leading MNCs is a very tough process. Multiple assessments of personnel, systems and facilities are done during the approval process.

When manufacturing starts, ongo-ing audits from national and interna-tional Quality teams is routine. Being a manufacturer for so many MNCs over the years (since 1994) has meant that our Quality and Manufacturing processes have improved continuously, guided by leading international and national experts. Many if not all com-panies would lay claim to quality. However, in Macter’s case I think it is amply validated through our contract manufacturing track record.

As far as pricing is concerned, it is a sensitive issue for the industry. There are two widespread misperceptions which I think must be clarifi ed before-hand: one, prices of medicines are very high in Pakistan. On the contrary, prices are amongst the lowest in the world. Pakistan is the fi fth largest pharmaceutical market by volume but only the 55th largest by value. Many products are more economical in Pakistan than even India, which is generally a benchmark for low pharma prices because of its large population base and indigenous raw material manufacturing industry.

Two, pharmaceutical industry enjoys very high profi t margins. If one were to analyse published fi nancials of

listed companies, one would realise that Pharma margins have declined drastically and are much lower than many other industries. Continuous infl ation, depreciation of Pak Rupee and lack of a rational pricing policy has squeezed margins to the extent that many companies have discontin-ued their brands or even exited Pakistan completely.

To give an example, locally-manu-factured herbal cough syrups may be selling huge volumes at Rs200 per bot-tle across the country. Whereas a regis-tered cough syrup, enjoying signifi -cant brand equity in Pakistan, might be waiting for years to get an infl ation adjustment in MRP from, say, Rs30 to Rs40. And due to failure to get this adjustment the brand is being discon-tinued.

Paradoxically, keeping prices low or irrationally fi xed, eventually leads to deterioration of quality standards, and harms patient’s interest. If companies are unable to realise a fair return on their investments, they will not be able to plough back profi ts into research, new quality control equipments, more advanced manufacturing machines, more qualifi ed personnel.

In the past, the industry survived because newer registered drugs would have better margins. So while the old registered products would gradually become unprofi table, sales of new brands would keep the companies in good fi nancial health.

However, as the industry matured and a phase of consolidation set in, along with the delays in new product registrations at DRAP (almost three years of pending applications), the sit-uation has become critical and extremely challenging for most com-panies. The industry has lost signifi -cant growth momentum due to this singular factor and if the pricing pol-icy issue is not resolved, it will remain

a serious threat to the industry and by extension to Pakistan.

Despite the above, Macter, as a mat-ter of social obligation and religious recommendation (the Prophet Peace Be Upon Him considered keeping prices low a meritorious act) has always tried to keep prices reasonable and affordable (while maintaining quality as mentioned above).

This has been possible due to our large manufacturing volumes: partly through our contract business and

partly because low prices lead to higher volumes. Going forward we will be doing our very best to continuously keep improving standards by invest-ing in people, facilities and equip-ments, while balancing reasonable profi tability and affordable pricing levels for the patients.

You have mentioned some industry challenges. What do you think is the global potential of the Pakistani phar-maceutical industry?

I believe that there is tremendous global potential for Pakistani pharma-ceutical companies which are sin-cerely committed to quality. We have seen India capitalise on the global need for affordable generics and become the leading supplier of generic APIs and formulations of the world in a matter of 25-30 years.

We are also seeing the recent spate of US FDA actions against (what is seen as) systemic violation of GMP principles by some of the largest Indian generic manufacturers.

I was in Africa and met a WHO offi -cial who encouraged me to participate in WHO tenders for medicines. When I asked him what value we could create for WHO when there were so many Indian and Chinese companies com-peting for the very same tenders, his answer was: “Quality!”

I, therefore, believe that if leading Pakistani companies focus on upgrad-ing their manufacturing and quality standards to WHO levels, not just on paper, but with the right intent and approach, we will have tremendous opportunities to serve patients glob-ally.

The second pre-requisite to success-ful global presence would depend upon innovation. I believe Pakistani companies must innovate and venture into technically diffi cult areas. For sure, there will be higher risks. But

that is what entrepreneurship is all about.

Macter over its history has invested in qualifi ed technical personnel with this very intent. Macter was perhaps the fi rst national company to develop a Class 10 fi lling area for parenterals in the early 1990s. Macter also became the fi rst and only national company to invest in local manufacturing of Metered Dose Inhalers and then its successful transition from CFC to HFA gas. And, then, more recently, there

has been the investment in a facility for the biologicals.

I believe that DRAP can play a cru-cial role in this regard by continuously upgrading regulatory standards and adopting a pricing policy which con-trols pricing of essential medicines only, but de-regulates prices of the rest of the medicines.

Quality and medicine prices are cru-cially interlinked. Investments in quality cannot be done without reason-able profi ts. Deregulation does not

mean prices will only keep moving in one direction i.e. upward. Rather free competition will ensure, as it has glob-ally, that prices for generics will refl ect equity.

The entire burden of providing med-icines to the poorest segments of soci-ety cannot rest upon the pharmaceuti-cal industry. As in other countries, the government needs to create safety nets and assume primary responsibil-ity in this regard.

Leading companies are expected to do increasingly more as part of CSR. What can you share about Macter’s CSR initiatives?

I think CSR starts by fulfi lling the basic responsibilities of being a corpo-rate citizen. For us this primarily means ensuring that our products are effi cacious, safe and affordable. That all our business operations and con-duct are compliant with laws and regu-lations. That Zakaat is paid. I strongly believe that CSR initiatives under-taken by companies without ensuring the basics are questionable.

As part of CSR, amongst other initi-atives, every year on a regular basis we provide free or highly discounted med-icines to reputable charitable organi-sations. Similarly, we routinely spon-sor initiatives for up-gradation of pub-lic health facilities across Pakistan.

We have an ongoing skills develop-ment programme for general workers so that they can enhance their work-re-lated skills for better remuneration and improved employability. Some of the courses offered such as ‘certifi ca-tion in mobile repairing’ may not even be specifi cally related to our industry.

We also try to provide as much sup-port as we can to Depilex Smile Again Foundation — an organisation work-ing to provide medical, fi nancial and rehabilitation support to acid-burnt women.

We are living in a very challenging environment and much needs to be done for our people. We pray that Macter is accepted for greater social service. Ameen!

What are the core values and princi-ples which have helped Macter achieve its current position among hundreds of pharmaceutical companies?

Our foremost principles are Benevolent Intent, Sharia Compliance, and Continuous Improvement. Keeping in mind that living a princi-

pled existence is a life-long challenge, and that at any given time there will be many gaps and room for improve-ment, with humility I would like to explain what these principles mean to us.

Success depends upon intent. Intent must be benevolent towards all: patients, customers (doctors), employ-ees, shareholders, suppliers, regula-tors, government agencies, commu-nity, society and so on. Maintaining a benevolent intent means always being conscious that our aims and actions are never detrimental to the rights and interests of the other.

It means that when we engage, we engage primarily to benefi t and serve the other, fully confi dent that our interests are already protected. Let us look at an example of this approach towards the employees. The standard response to what is management would be “to get work done through people”. A benevolent response would be to “develop peo-ple through work”. Work will get done nonetheless, but the intent is altogether different.

The beauty and power of benevolent intent are brought to life by Sharia (Islamic law) Compliance. Therefore, following Sharia regulations and standards for trade and business helps us to implement Benevolent Intent in our everyday operations. Compliance with all government laws and regula-tions is also part of following Sharia.

This provides us a deeper anchor to following the law of the land. We have an internal Sharia compliance process whereby the Audit Department (in addition to standard control audits) assesses the degree of operational compliance with Sharia standards and helps operational teams to come up with compliance plans for rectifying any gaps.

Continuous improvement is a com-mitment to a cycle of lifelong learning: applying what we know, learning from our mistakes and successes, applying this new knowledge. In order to sur-vive in an increasingly globalised and competitive world, our rate of learning and improvement in all areas of busi-ness operations must be at par or above that of our peers. There is no failure – only feedback. The more effectively we convert feedback into improve-ment the faster we can move forward in our quest to improve health and well being of humanity.

Patients are burdened with costly imported biological medicines

An interview with Mr Asif Misbah (Managing Director),Macter International Limited

SOUTH ZONE

PHARMA LINK ...........................................KARACHINOORANI MEDICOS.................................THATTAPREMIER AGENCIES ..............................HYDERABADPHARMA HOUSE.......................................MIRPURKHASPREMIER AGENCIES ..............................NAWABSHAHAL-HUSSAN DISTRIBUTORS ..............SUKKURTARIQ NAZIR & CO ...................................JACOBABADASIF MEDICOSE .........................................DADUMUSTAQ MEDICOSE ................................LARKANASIDDIQUE MEDICINE CO ......................RAHIM YAR KHANGALAXY DISTRIBTORS .........................QUETTA

NORTH ZONE

DRUG SERVICES ..................................RAWALPINDIZEESHAN ENTERPRIESES ..............CHAKWALRABBANI TRADERS ...........................ATTOCKUNITED DISTRIBUTORS ..................ABBOTABADB.H. DISTRIBUTOR ..............................PESHAWARMADINA ENTERPRISES ...................KOHATNASIR MEDICOS ..................................BANNUDRUG AGEICIES ...................................MARDANDIDAR ENTERPRISES .......................SWATAMIN MEDCOSE ..................................TIMERGARAHALAM ENTERPRISES ........................CHITRALSHAN MEDICINE CO ..........................GILGIT

CENTRAL ZONE

ASLAM TRADERS .........................................BAHAWALPURJ.S. ENTERPRISES.........................................MULTANSIMS PHARMA ................................................KHANEWALAAL AHAD MEDICOS .....................................LAYYAHAL –FATEH MEDICINE COMPANY .......BUREWALAASLAM TRADERS .........................................BAHAWALNAGARZAM ZAM ENTERPRISES .........................DERA GHAZI KHANRAUF DRUG AGENCIES .............................SAHIWALNEW ALI HAJVERY MEDICOSE ............OKARABABAR MEDICINE CO .................................LAHOREA QADIR MEDICOSE ....................................KASURAL-ABAD MEDCINE COMPANY ............SHEIKHUPURADIAMOND TRADING CO ............................GUJRANWALAYOUNUS SONS ................................................GUJRATIDEAL TRADERS ...........................................JHELUMIQBAL BROTHERS .........................................SILAKOTAL HAFEEZ DISTRIBUTORS ...................FAISALABDNOOR ENTERPRISES ..................................SARGODHAAKBAR DRUG AGENCIES .........................TOBA TEK SINGHSAMEEL DISTRIBUTORS ..........................JHANGFRIENDS MEDICINE COMPANY ...........BHAKKARZAKA & SONS MEDICINE CO ...................MANIWALISHAMS ENTERPRISES ...............................DERA ISMAIL KHAN

Macter International would like to thank its business partners for their continued support

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